It isn't innovation to simply ignore local accommodation laws. If ignoring the law is innovation then I think a lot of people would like their prison sentences reduced as after all they were just innovating.

...for establishing a system of competition based on government regulation rather than quality of goods and services. I'm sure harassing 124 small time hosts will help the big players, who line the pockets of politicians with contributions, scare off hundreds more. And of course, since New York has no other crimes to look into, this is a perfectly prioritized use of limited prosecutorial resources./sarc

No - there are always definitly easy to spot bad actors on such platforms. These can range from stupid assholes who want to rent out their garbage collection room, people who are acting like they ren something out in private, but in reality operate a full-scale business circumventing regulations and possibly taxes.

It seems that in NY there are 10000s of hosts. Figuring out the most criminal 1% of these has nothing to do with killing innovation but more wit doing a service to the customers (reputation for the hosts and safety for the customers).

People actually want hotels and motels regulated. A few reasons I can think of:

1. Most people don't want a motel to pop up next door. By that I mean they don't want you renting out your house in the neighborhood to random people. Ask a few homeowners what they think about someone turning their neighbors house into a rental (and that's medium term).

2. Most people don't want an actual motel within a mile or more of them. Again, it represents passers through. Also motels are notorious for crime and housing some unfavorable types, depending on the location, scale, and many other factors. But people fear the worst.

Vast generalization here (I'm not a legal scholar)- but it looks like laws have been put in place to 1) encourage something viewed as good by the legislature or 2) discourage something viewed as bad by the legislature. What is viewed as "good" or "bad" is up to the legislator, the folks that the elected the legislator, the folks that the legislator represents, and most important to our current system of campaign finance, the folks that pay for the legislator's campaign. Airbnb is ostensibly a mechanism to allow people to profit from use underutilized space. Unfortunately some of the underutilized space is contained in clauses in lease agreements that the Airbnb hosts chose to ignore.

The hotel laws were put in place because of abuses. Rent control was put in place because of abuses and to encourage affordable housing. The "bad actors" are those that are abusing the system at the potential risk to their customers- and they are customers, not guests. Because of the immense amount of money moving around, there will be abuses and bargains. Leave it up to a company to determine the bad actors, and they will invariably call out those that pose the greatest risk- and since it is a profit driven company, risk is about money, with no consideration given to public welfare (ostensibly the government's arena).

1. Do nothing,
2. Ask them to stop again (politely, with or without warning about going to authorities),
3. Ask them to stop again (not politely, with or without warning about going to authorities), and
4. Go straight to the authorities.

My recommendation? Go straight to the authorities. You've been polite, and you do not deserve to suffer as they benefit. Make no mistake, the only reason they are doing AirBNB is to profit. You have every right not to suffer a 'diminished quality of life' (as you, very succinctly I must say, put it) just so they can put an extra, what...$30 a day(?) in their pocket.

Strictly speaking, anyone operating an AirBNB rental is operating a business. They are providing a service/resource to those who are willing to pay. Is an expense to that business paying the people around him to allow him to do so? Maybe (we as a society seem to endorse the idea of a 'money to QoL' ratio). So, my next question is this: is Mr. Ignorant claiming that income on his income tax? I imagine not. That might be more legal leverage you have in this case. (Side note: little do most people know that if you legitimize a business, a huge array of tax incentives start rolling in (proportionally expense your Internet, heating, electricity, computers, vehicle, etc).